On October 18, 2022, the Internal Revenue Service (IRS) announced updated regulatory limits for FSA, Transit, and Adoption Assistance plans for 2023. These were included in IRS Revenue Procedure 2022-38.
2023 FSA Limit
The maximum annual contribution for Health FSAs will be $3,050 for the 2023 plan year, an increase from $2,850 in 2022.
There are no changes at this time to Dependent Care FSA limits, which remain $5,000 for married filing jointly or head of household and $2,500 for married filing separately.
2023 FSA Carryover Limit
As you may know, the annual FSA Carryover limit is indexed to the annual contribution limit at a rate of 20%. With the annual FSA limit increasing for 2023, the annual FSA Carryover limit is also increasing to $610. This compares to a Carryover limit of $570 in 2022.
2023 Commuter Limits
The qualified transportation fringe benefit and monthly qualified parking benefits are each increasing to $300 per month for the 2023 plan year. This compares to $280 per month in 2022.
2023 Adoption Assistance Limit
The annual limit for employer-sponsored Adoption Assistance will be $15,950 in 2023. This compares to $14,890 for 2022.
For more information, refer to IRS Revenue Procedure 2022-38.
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